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Expert: National health care bill could increase number of uninsured Americans

Expert: National health care bill could increase number of uninsured Americans

The new national health care bill may attempt to address the exploding cost of health insurance in the country, but according to one expert, the way it does so could lead to a destabilized industry that leaves many uninsured.

The problem, says Janet Trautwein, CEO of the National Association of Health Underwriters, is that the insurance industry may generate large revenues, but it operates on a razor-thin profit margin. That, she says, is undermined by a requirement that insurance companies spend a certain percentage of revenues on medical claims. These so-called "minimum loss ratios" have been adopted in 15 states already, Trautwein wrote in an editorial for the Florida Sun-Sentinel.

Insurance companies pocket just six cents for every premium dollar, the Centers for Medicare and Medicaid Services says. Another 86 cents goes to care, and most of the rest covers services that benefit patients and decrease long-term costs.

"By requiring insurers to spend a certain amount on claims, lawmakers think they can bring down insurance costs and help consumers get their money's worth," she wrote. "The facts speak to the contrary."

David Williams, co-founder of MedPharma Partners, says these changes will eventually drive up premiums as competition for policyholders increases.